Both Apple and Samsung Electronics significantly lowered their performance forecast over concerns of world economy slowdown and China-US trade war.
Samsung Electronics’ sales and operating profit in the fourth quarter of last year decreased by 10.6% and 28.7% respectively compared to the same period last year.
This is due in-part to Apple’s poor figures, a company that despite its warm-cold relationship is a major consumer of Samsung phone screens and memory chips.
The fundamental problem in sales the on going trade war between the US and China, the biggest markets for Apple while simultaneously showing signs of slowing economies. For the first time since 2007, Apple (sharply) lowered its performance guidance on the 2nd due to poor performance in China, which indirectly hurts Samsung.
According to a Bloomberg analysis, Apple lowered its sales forecast for the first quarter of 2019 from $89B USD to $94B USD. It is also 8% less than the market’s estimated $91.5B USD. The sluggishness of Chinese mobile phone manufacturers and cloud companies also makes the memory market less optimistic.
“The slow sales of chips to major Chinese cloud companies have increased Samsung Electronics’ inventory levels,”
Kim Young-woo, a researcher at Samsung Securities Co said in Reuters